Hospital financial challenges make projections tricky

BVWireIssue #197-2
February 13, 2019

healthcare, healthcare appraisal

A recent survey reveals some of the financial issues that valuation experts should examine when doing projections. For the third year in a row, financial challenges top the list of what’s keeping community hospital CEOs awake at night, according to the American College of Healthcare Executives’ annual survey. Governmental mandates and patient safety/quality both ranked second. Personnel shortages ranked third. Drilling down into the financial issues, the three biggest money worries are increasing costs for staff, supplies, etc. (cited by 70% of respondents), Medicaid reimbursement (68%), and reducing operating costs (59%). Other pressing financial matters include bad debt, increased competition, Medicare reimbursements, transitioning from volume to value, and more. The responses provide a veritable road map of topics to investigate and ask management about when doing projections.

Extra: Join healthcare valuation expert Mark Dietrich (Mark O. Dietrich CPA, PC) for a webinar, Mastering the Nuances of Healthcare Valuation Engagements, on February 20.

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